Business Monitor International


India Business Forecast Report

Published 29 January 2014

  • 55 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
India Business Forecast Report

Core Views

  • There remains a high degree of uncertainty over the end results, due to increased factors driving a fragmentation of the vote in India's upcoming lower house elections which will be held from April 7 to May 12. We maintain our expectations for the opposition (and more market-friendly) Bharatiya Janata Party (BJP) to lead the next coalition government. Fuelled by the disappointment rule of the United Progressive Alliance (UPA)'s second term in office, this had initially had significant realisation potential. However, since the impressive vote win in the state of Delhi, the BJP now faces contenders from both its old compatriots such as the Indian National Congress, as well as new competition from up and coming parties such as the Aam Adani Party (AAP).

  • India's painful process of external rebalancing is almost complete, and this will set the stage for an economic growth revival in FY2014/15 (April-March). The pace of recovery will depend on the timing of monetary easing, as well as a decisive and business-friendly outcome to the 2014 general elections. We are optimistic on both these fronts and expect investment activity to pick up materially over the course of the year. Our constructive outlook is reflected in our real GDP growth forecast of 5.6%, which sits above consensus expectations of 5.4%.

  • Although headline inflation has eased somewhat in India, they remain at elevated levels, amongst the highest in the region. Acute food price pressures, as supplies often constrained by logistical inefficiencies and prices, further boosted by minimum support levels dictated by the government, lie at the heart of the problem. Expansionary government policy further exacerbates these pressures. Absent a major reduction in subsidies and minimum support prices for agricultural goods, both of which are unlikely even post-election, there is a risk that the Reserve Bank of India (RBI) may be forced to keep interest rates tight for longer in FY2014/15.

  • The Indian...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Election Scenarios: The Good, The Bad, And The Ugly
8
TABLE: INDIA POLITICAL OVERVIEW
8
TABLE: Key Smalle r Regi onal Parties
9
TABLE: Opinion Polls For General Elections 2014
10
Long-Term Political Outlook
11
The Test Of Rising Prosperity
11
Chapter 2: Economic Outlook
15
SWOT Analysis
15
BMI Economic Risk Ratings
15
Economic Activity
16
Rebalancing Complete, Recovery Awaits
16
TABLE: ECONO MIC ACTIVITY
16
Monetary Policy
18
The Curious Case Of Indian Inflation
18
TABLE: Minimum Supp ort Prices For Key Comm odities , INR /tonne
18
TABLE: MON ETARY POLICY
19
Fiscal Policy
20
Another Year Of Fiscal Disappointment
20
TABLE: FISCAL POLICY
21
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Contents
Contents
Exchange Rate Forecast
22
INR: Our Regional Pick For 2014
22
TABLE: Currency Forecast
22
TABLE: CURRENT ACCOUNT
24
Chapter 3: 10-Year Forecast
25
10 Year Forecasts
25
Will Indian Growth Live Up To Expectations-
25
table : Long-Term Mac roec onomic Forecasts
25
Chapter 4: Business Environment
29
SWOT Analysis
29
BMI Business Environment Risk Ratings
29
Business Environment Outlook
30
Table : BMI Busi ness And Ope rati on Risk Rati ngs
30
Institutions
31
Table : BMI Legal Framew ork Rati ng
32
Infrastructure
33
Table: Labour Force Quality
33
Table: Top Export Destinations
33
Market Orientation
35
Operational Risk
37
BMI Industry View
39
Chapter 5: Key Sectors
39
table: Autos Sector - Sales And Production, 2011-2018
39
table: Autos - Trade, 2011-2018
40
BMI Industry View
42
table : Food Consumpti on Indicat ors - Hist orical Data & Forecasts , 2010-2017
44
table : Hot Drinks Value /Volume Sales - Hist orical & Forecasts , 2010-2017
45
table : MGR Sales By Format - Hist orical Data & Forecasts , 2010-2017
47
Other Key Sectors
49
table : Oil & Gas Sect or Key Indicat ors
49
table : Pha rma Sect or Key Indicat ors
49
table: Infrastructure Sector Key Indicators
49
table : Telec oms Sect or Key Indicat ors
50
table : Defe nce & Secu rit y Sect or Key Indicat ors
50
table : Freig ht Key Indica tors
50
Chapter 6: BMI Global Assumptions
51
Global Outlook
51
Momentum To Continue In H114
51
Table : Global Assumpti ons
51
Table: Developed States, Real GDP GrowtH, %
52
Table : BMI VERSUS BLOO MBERG CON SENSUS REAL GDP GRO WTH FOR ECASTS, %
52
Table : Eme rgi ng Markets , Real GDP Growth , %
53

The India Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in India and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of India's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of India's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise India's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in India, including currency volatility, the commodity price boom and protectionist policies.

The India Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the India economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for India through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The India Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for India and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on India, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in India over the next 5-years?

BMI's India country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the India Market - Political Strengths, Weaknesses, Opportunities and Threats facing India.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for India's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark India's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for India, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of India's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

Key Sector Outlook

Which industry sectors in India will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in India's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express